8-KMaterial AgreementsFinancial Events

DEXCOM INC 8-K Report, Material Agreement (Dec 21, 2018)

Filed December 21, 2018For Securities:DXCM

Summary

DexCom, Inc. (DXCM) announced on December 21, 2018, the entry into an Amended and Restated Credit Agreement, effective December 19, 2018. This agreement amends and restates their previous credit facility, establishing a new $200.0 million revolving credit agreement with JPMorgan Chase Bank, N.A., as administrative agent. The facility also includes a subfacility of up to $10.0 million for letters of credit. As of the reporting date, DexCom had no outstanding loans but had $4.4 million in outstanding letters of credit under the original agreement. The primary purpose of the revolving credit facility is to provide general corporate purposes, including working capital and capital expenditures. The agreement allows for borrowings in multiple currencies, with a $50.0 million sublimit for non-USD borrowings. Importantly, DexCom has the option to increase the total facility size by an additional $300.0 million, potentially bringing the total available credit to $500.0 million, subject to lender approval. The credit agreement is secured by substantially all of DexCom's assets and its domestic subsidiaries' assets, and is guaranteed by these subsidiaries. Covenants include maintaining specific financial ratios and limitations on various corporate actions.

Key Highlights

  • 1DexCom entered into an Amended and Restated Credit Agreement for a $200.0 million revolving credit facility.
  • 2The facility is available for general corporate purposes, including working capital and capital expenditures.
  • 3There is an option to increase the total credit facility by an additional $300.0 million, potentially reaching $500.0 million.
  • 4The credit agreement allows for borrowings in US Dollars and has a $50.0 million sublimit for foreign currency borrowings.
  • 5The agreement is secured by substantially all of DexCom's assets and guaranteed by its domestic subsidiaries.
  • 6The credit agreement contains customary covenants, including financial ratio maintenance and restrictions on certain activities.
  • 7The facility matures on December 19, 2023, with specific conditions related to convertible senior notes that could shorten the maturity.

Frequently Asked Questions

The Amended and Restated Credit Agreement provides DexCom with a $200.0 million revolving credit facility, which is primarily intended for general corporate purposes, including working capital and capital expenditures. This ensures the company has access to funds for its ongoing operations and strategic investments.

Yes, DexCom has the option to increase the maximum principal amount available under the Amended Credit Agreement by up to an additional $300.0 million. This means the total potential borrowing capacity could be increased to $500.0 million, subject to the approval and commitment of the lenders.

The obligations under the Amended Credit Agreement are secured by a first-priority security interest in substantially all of the assets of DexCom and its existing and future wholly-owned domestic subsidiaries. This includes a portion of the equity interests in domestic and first-tier foreign subsidiaries, but excludes real property and intellectual property.

Yes, the Amended Credit Agreement includes customary covenants that require DexCom to maintain a maximum leverage ratio and a minimum fixed charge coverage ratio. These are financial performance metrics designed to ensure the company's ongoing financial health.